Kotaku has news that Sony is shutting down Sony Liverpool, the studio once known as Psygnosis (thanks nin). They have an official statement from Sony on the reasons for closing the developer of the original Lemmings and the Wipeout series. Here's part of that:

It has been decided that Liverpool Studio should be closed. Liverpool Studio has been an important part of SCE Worldwide Studios since the outset of PlayStation, and have contributed greatly to PlayStation over the years. Everyone connected with Liverpool Studio, past and present, can be very proud of their achievements.

However, it was felt that by focusing our investment plans on other Studios that are currently working on exciting new projects, we would be in a stronger position to offer the best possible content for our consumers.

Our Liverpool Facility will continue to operate, housing a number of other vital WWS!E and SCEE Departments.